Consumer Staples (e.g., Procter & Gamble) are steady but often slower growers than more cyclical groups like Energy (e.g., Exxon Mobile). Moreover, the increasingly indispensable role of information technology in everyday life has transformed Technology (e.g., Apple and Google) into a sector similar to Consumer Staples – i.e., less vulnerable to cyclical downturns, implying more stable earnings, but with higher growth and lower dividend yields. (See our previous feature – Natural Re-alignment). That makes these sectors attractive in uncertain times.

Strategic Implications:

The post-election economic and geopolitical environment which initially favored cyclicals has turned much more perilous. This favors Consumer Staples and Technology going forward. (See our previous features – Un-natural Selection and Is Obsolescence Priced In?).

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